Annuity rates are normally based on 15-year gilt yields, which rose sharply to 2.39pc at the end of last week, compared with recent levels of about 2.1pc.

The rule of thumb is that annuity rates rise by 8pc for every percentage point rise in the 15-year gilt yield, according to Billy Burrows of Better Retirement Group. As this yield has risen by 0.29 of a percentage point, annuity rates should rise by 2.3pc if the rule holds.

The best rate available to a 65-year-old male annuity buyer with a £100,000 pension pot is £5,920, according to the Alexander Forbes Annuity Bureau. A 2.3pc improvement in rates would mean an extra £136 every year, taking the total income to £6,056.

However, buyers should not expect an immediate rise in annuity rates.

"The first rule of the annuity market is that insurers are quick to cut rates when gilt rates fall but slow to raise them when gilt rates rise," Mr Burrows said. "In fact, one company, Legal & General, has just cut its rates."

He said the slowness of the response was down to a lack of competitiveness in the market. "Annuity firms have no real incentive to raise rates," he added.

Prudential said: "We have no immediate plans to make any rates changes following recent fluctuations in gilt yields. However, we regularly review our product pricing in line with market conditions and we will continue to monitor any fluctuations as part of this strategy."

Gilt yields, and therefore annuity rates, are near historic lows because of the financial crisis.

Investors are taking their money out of countries perceived as risky, such as Greece, Spain and Italy, and putting it in what they see as safe havens – Germany, Switzerland, the United States and Britain, for example. The flood of money into government bonds in these countries has pushed prices up, causing yields to fall correspondingly.

Meanwhile, the Bank of England is buying large quantities of gilts under its quantitative easing programme. The presence of such a major buyer in the market is also supporting prices and depressing yields.